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Apr 15, 2009 1:34 PMPublication: The Southampton Press

Southampton Town must issue $16 million in bonds this year

Apr 15, 2009 1:34 PM

While most capital projects are financed over time through bonds, the cost of some is paid directly with money in the general fund—or cash the town actually has on hand. Such was the case in 2004, 2005 and 2006. However, while the transactions 
from the general fund to the capital fund were made on paper, the actual cash was never taken from one account to the other. Thus, the money remained in the general fund and was used 
for other purposes—instead of funding the capital projects, the money boosted the size of the general fund surplus 
and was used to avoid tax rate increases.

Former town comptroller Charlene Kagel revealed to Ms. Kabot and Mr. Jones in March that the transactions were never done and blamed “human error” for the bookkeeping blunder.

Ms. Kabot, however, said that there was no reason why the town should not have been informed of the mistake earlier. “The bookkeeping errors mark a major failure that raises questions of mal-administration. I’m shocked and outraged that this information was harbored and not shared with the Town Board,” she said. “Clearly, budgetary games were played.”

While Mr. Heaney acknowledged in an op-ed piece that he used general fund surpluses to keep taxes low, he rejected Ms. Kabot’s rhetoric. “Let’s be very clear,” he states in a Viewpoint published in this edition of The Press. “I was fortunate to serve as supervisor during a period of prosperity and economic stability. My administration was bipartisan, and Linda Kabot was there and voted in the affirmative for every budget during those years. One of the things we got right over six consecutive years was the ability to hold the line or moderate tax increases in the property tax rate because excess revenue gave us the ability to use surplus to provide a small measure of tax relief.”

Ms. Kabot, however, said taxes should have been raised incrementally during those boom years. “That’s when you should go to the taxpayers—when times are good and they can absorb it,” she said.

The $6 million accounting error, which has put the town in the hole, will likely result in raised taxes for 2010, according to the supervisor. “This may get darker and dirtier until we get to the bottom of it,” she said.

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Linda's rationalizations and blame games are getting very stale. When will she show some leadership qualities?
By Hampton (50), Westhampton on Apr 15, 09 2:34 PM
Good job Linda-looks like progress is being made. As far as the $16 million dollar number-it could have been worst.
By eastquogueguy (22), East Quogue on Apr 15, 09 2:49 PM
Kabot was on the Town Board and voted for all of the budgets but is now "shocked" about the financial slight of hand. Maybe if she did her job and did not just rubber stamp a budget offered by fellow Republicans, the Town would not be in this mess. Did she read the budgets and understand them, or just nod her head yes like a puppet?

Want to fix the problem? No more town cars, phones, pensions and health insurance for Town Board members and their cronies inside Town Hall. That should ...more
By CommonSense (71), Southampton on Apr 15, 09 3:37 PM
Anyone in town hall hear of a chart of accounts, cost/revenue centers, commingling accounts? This i s bizarre. Would an individual tax payer put his wage income in schedule D? No. Come on, this is basic accounting.
By number19 (111), Westhampton on Apr 15, 09 4:20 PM
“We’re all guilty of it." Who is "we"? The buck stops with you, Ms. Kabot
By peoplefirst (787), Southampton on Apr 15, 09 4:38 PM
A pool? That's the last thing this town can afford, unless Linda has new and more original ideas of how to hid money so the next administration can pay.
By Lefty46 (56), Westhampton on Apr 15, 09 4:48 PM
Why should the former administration raise taxes? According to Linda “That’s when you should go to the taxpayers—when times are good and they can absorb it,” That is crazy. If they raised taxes for no reason, the Town would have spent that money too. We would still be in the same sinking boat with Linda at the helm.
By Mom of 2 (12), flanders on Apr 15, 09 8:03 PM
Number19 has it right - cost centers - basic accounting - simple stuff - no co-mingling.
I think Linda is addressing the situation - a lot of smoke and mirrors in the past administration - shame on them - they never should have resorted to this for a political gain by robbing Peter to pay Paul.
By North of Highway (280), Westhampton Beach on Apr 15, 09 9:43 PM
Thank you Skip Heaney for a fine job. Three years of fudging the figures.
Thank you Linda for following him over the cliff. And we keep voting them into office. What is wrong with us?
By Bob Whyte (48), Hampton Bays on Apr 16, 09 7:36 AM
Just a little foresight . I am hearing ugly rumblings from neighbors that are not pleased with the fact that houses similar to theirs are now being offered substantially below assessed valuation.Question? What will this Township do when their voices unite and demand a downward reassessment of property taxes.
By Father of 4 (4), Hampton Bays on Apr 16, 09 11:04 AM
The Town has made some serious mistakes by overdeveloping CR 39... look for the upcoming Peconic environmental crisis and threat to resort status. Mark my words -- we shall pay dearly. Money is one thing, health is another.
By deKooning (106), southampton on Apr 16, 09 11:19 AM
Father of 4 - tick...tick...tick....you're right
A time bomb of owner/voter anger getting ready to blow.
A disaster in the making
solution - a leaner and meaner government - somehow contain costs while providing services - a challenge to be sure that requires real managers with real skills and non-political considerations.
By North of Highway (280), Westhampton Beach on Apr 16, 09 12:39 PM
Let's see...who was on the board of the last administration? Oh...it was Nancy, Chris, and Linda. They could have done something about this mess years ago. They had a majority then and still have a majority now; it took new people on the Town Board to ask the right questions. We must now press the question, "Why didn't these board members do something when this was happening?”
By SHNative (554), Southampton on Apr 17, 09 7:03 PM
Our taxes in general with the exception of different school district funding requirements are very low when compared to surrounding towns. Just look at Riverhead & Southold they are 2-3x what your paying. I sort of agree with Kabot that during good times the taxe increases could have been absorbed better. But what seems to be comng out of this is that the governemtn has not been run like a business or by business people. If it were this would have been found out and handled a long time ago. The ...more
By North Sea Citizen (568), North Sea on Apr 18, 09 7:16 AM
Had the projects been properly bonded at the time, the operating budget should have been reduced to reflect the $10 in excess funds used improperly for capital projects. Also, with the current financial crisis in the debt market, we'll pay more over the life of the 30 year bonds for higher interest. Thanks Heany and Kabot.
Who is Ministat Services? Sounds like a "connected" firm that offered bad advice. Southampton Press-why not dig into this "consultant?"
And $20 million for another ...more
By sansouci (9), Southampton on Apr 19, 09 4:39 PM